Home equity options
Five ways to use your equity, one honest comparison.
Every product below is legitimate. The right one depends on your income, your existing mortgage, your age, and what you need the money to do. Here is how they differ — including the parts lenders prefer not to lead with.
Side by side
Turn products on and off to compare only what applies to you. Every option below is legitimate — the right one depends on your income, your existing mortgage, your age, and what you need the money to do.
Compare:
Monthly payment required?
Yes
Yes, typically interest-only
No required monthly principal & interest payment
Generally, no required monthly P&I payment
Varies by product; may offer reduced or flexible payments
Keep an existing first mortgage?
Yes, when HELOC is in 2nd position
Yes, when structured in 2nd position
Existing liens generally must be paid off at closing
Some products can be structured in 2nd position
Product dependent
Qualification
Income, credit, debt-to-income, equity and lender requirements
Income, credit, equity and program requirements
Financial Assessment, property eligibility, age (62+) * and sufficient equity; no traditional DTI qualification
Product-specific credit, income/equity and age (55+) requirements
Product-specific
Access funds over time?
Yes, during the draw period
Yes, depending on program
Yes, with adjustable-rate HECM line of credit
Product dependent
Product dependent
Could future access to the credit line be reduced or frozen?
Yes. The lender may freeze or reduce available credit under circumstances permitted by the loan agreement and applicable law, including certain significant declines in property value
Product dependent
Not in the same manner as a HELOC. Available HECM LOC funds are governed by the HECM loan terms rather than a lender's discretionary HELOC credit-line management
Product dependent
Product dependent
Could payments change substantially?
Yes. Variable rates can change payments, and payment shock may occur when the draw period ends and repayment begins
Depends on rate and repayment structure
No required monthly P&I payment; interest and applicable charges accrue to the loan balance
Generally no required monthly P&I payment; terms vary
Payment structure varies by product
FHA insured?
No
No
Yes
No
No
Best reason to explore it
Familiar revolving credit for homeowners who can comfortably qualify for and make the required payments
Access equity while potentially retaining an existing first mortgage
Access home equity without required monthly P&I payments and with HECM borrower protections
Additional options, including solutions for higher-value homes or needs not well served by HECM
Alternative retirement-focused financing with different payment and cash-flow structures
* Spouses younger than age 62 may participate in the HECM Reverse Mortgage program as a non-borrowing spouse.
The table narrows it down. Your numbers decide it.
A 30-minute conversation with your age, home value, and mortgage balance answers which of these actually fits. No SSN, no credit pull, no obligation.